Hiring Executives in a Hot Talent Market
In booming Texas, recruiting a high-performing executive has a lot in common with buying a home.
What do Texas’ talent market and housing market have in common?
Right now, both are very hot—and the usual approach to acquiring a home or an executive leader won’t get you the results you want.
Think about how you might have bought a house in the past. A real estate agent finds a lovely home in a good neighborhood that fits your requirements. You look at pictures, go see it in person, look at a few others, decide which you like, make an offer, and it’s yours.
But that’s not the current reality. Today, homes often get offers before they go on the market or are sold within 24 to 48 hours of hitting the market. Bidding wars are prevalent, so your initial bid probably must be over the asking price, with counters expected.
Finding talent today is eerily like buying a house. There’s an economic boom going on in Texas, so if you need executive-level talent, it’s time to learn how to navigate the market and secure an executive who fits the needs of your business. The top talent you want typically isn’t available long.
Like buying a home, hiring a top-tier executive requires that you:
- Know what you are looking for
- Understand the market value
- Know your appeal
- Act fast when you see what you want
- Be willing to pay for what you need
Let’s look at why each of those matters.
Know What You’re Looking For
Real estate agents often get vague input from buyers: We want a home that better fits our needs. With a little pushing, they get more detail: four bedrooms, three baths. And if that’s all the agent has to go on, good luck getting what you actually want.
Similarly, executive hires often start with something like: We need a chief marketing officer. With a little pushing, the recruiter gets: They need to understand the tech industry. Same here; good luck on this search. That type of generic statement doesn’t tell a recruiter what specific type of CMO fits the needs of the business.
Why are CEOs so often vague in describing what they want in an executive? The problem is, most CEOs are hiring outside their own expertise and experience. Whatever path they came up through, they may have had little exposure in certain areas of the business—such as marketing, which makes it hard to describe the ideal CMO.
However, whatever your discipline, your career has undoubtedly required you to learn quickly and solve problems in areas you were previously unfamiliar with. That’s why you’re now CEO. Use your resources and key staff to determine the specific traits of an executive who is ideal for the position you’re hiring for. What are the baseline requirements? What are the desired attributes—the bonuses that would make the executive even more valuable?
Once you’ve created a profile of your ideal hire, you can be explicit with your recruiter about what success—in this role, in your business, right now—looks like.
Understand the Market Value
You might assume that a $600,000 house you looked at last year is now going for $625,000 to 650,000. In reality, it might be closer to $750,000, because a Fortune 2000 company relocated its headquarters a couple of miles away and is moving 700 high-level people here.
Salaries are changing just as fast as home prices. One company recently lost a well-paid, six-digit CTO to a Fortune 100 company that doubled the person’s salary. Houses and positions have “typical” price ranges, but their real worth is what someone will pay.
If you’re hiring a CMO, you need to understand what a CMO can make today, and salary databases and surveys don’t convey the current market fluctuations. Today’s compensations are fundamental supply-and-demand economics. Think of the stock market with its spikes and valleys. Determine your budget and understand how it compares to what executive talent can command on the market. The amount may be more than you thought, but the best do cost more.
Know Your Appeal
When the seller of a home chooses a buyer, there is more to the equation than the dollar value of the offer. A seller might consider what concessions are included, the timing of the offer, and even the personality and character of the buyers. Are they going to enjoy the home like the previous owner, or do they plan to tear it down?
When hiring an executive, there’s a similar dynamic at play. Does the employer offer the intangibles the executive is looking for? And does the personality and character of the executive fit the culture of the organization?
Everyone from millennials to seasoned veterans now want more than just a job and paycheck, such as a life outside of work. Ask yourself: What is desirable about your company and this position? It’s also important to examine cultural fit. Skills alone are not a sufficient reason to hire anyone. Ensuring the executive aligns with the values of the company and has the right chemistry will maximize ROI; a lousy fit can kill it.
Act Fast When You See What You Want
Making the final decision on a home buy can be challenging because we want to see other houses to ensure there’s nothing better out there. Meanwhile, the home that did meet all our requirements—and had lots of the additional bonuses—is gone, because we didn’t like that the game room had our alma mater’s arch enemy’s colors.
In home buying or hiring, time is of the essence, especially in a hot market. You should interview about three strong candidates who have all the required skills, possibly some of the desired skills, and that fit your culture and chemistry. This must be done in a tight window because if it drags out, you probably will lose.
Let’s look closer at this point, because it’s critical in today’s market. If your hiring plan requires a week or two to schedule a phone interview, then another week or two to set up a personal interview, and then another week or two to make an offer, you will miss out. Great talent is not around that long. And besides, you will have displayed to the candidate that you can’t make decisions.
In a market like the current one, opportunities seem to manifest themselves magically. A talented executive’s network, plus their own eyes and ears, will bring them plenty of opportunities.
A timer starts once you contact a candidate; whether consciously or not, they will measure how long you take to move the process forward. You must narrow down that window and make getting to an offer a high priority for all involved. Identify any unneeded delays in your process and fix them. When you see what you want, make a decision and promptly make an offer. A swift, well-laid-out process with good communication makes people feel that you want them.
Be Willing to Pay for What You Need
In a bygone time, you might have offered $25,000 less than asking on a home. That’s negotiation 101, right? But that’s not today’s market. Nice-looking homes in good neighborhoods in most Texas cities typically don’t go for less than the asking price. One house listed for $698,000 went for over a million dollars. That’s because buyers determine the market price, and some are willing to pay more.
The same holds very true in executive hiring. Your conception of a chief marketing officer’s compensation might have been accurate 12 to 18 months ago, but perhaps it’s $80,000 more today. Your budget may drive some of these decisions, but the fundamental question to ask is not “Can we afford this talent?” but “Can we afford not to have this talent?”
Exceptional talent has options, and some of those options may pay more than you. It may be hard to ante up, but when you get the keys to your dream house, you know you made the right decision. Likewise, when you do your homework and hire exceptional talent, you smile because you’ve secured the right talent—an executive who will drive real value in the business.
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The market in most parts of Texas is hot, so get ready for a new approach to recruiting executive talent. It’s not a marathon; right now, it’s a sprint—and you are up against world-class sprinters. When you see what you want, make it happen. Remember: The right talent disappears fast, and you have to pay for what you get. If you’ve done your homework and hired well, the person will pay for themselves as they help take you to that next level and beyond!
